Political unrest in MENA results in 12.1% drop in adspend
Political unrest in MENA results in 12.1% drop in adspend
Jul 20News in this week sees ZenithOptimedia drastically reduce its Middle East and North Africa adspend for the year.
Original forecasts set by the media agency, had predicted adspend for 2011 at a 0.1% growth. In April this year, the agency issued an update to this forecast, which showed significant declines in Egypt and Bahrain, due to the political unrest experienced in those countries. However, a further more dramatic decline is now forecast across the region, with adspend set to drop by 12.1% this year. The predicted decline is now set to affect Egypt, Bahrain and Oman the most, with forecasts for the UAE and Saudi Arabia also now having been decreased to show negative growth. In April, ZenithOptimedia predicted that Egypt’s adspend would decrease by 20%, after the political unrest in the country. This has now been further reduced to a decline of 40.6%. Similarly in Bahrain, the total adspend was expected to drop by 65.1% compared with the 19% forecast in April. The UAE and Saudi Arabia, countries with some of the greatest adspend in the region, are also suffering. Forecast to rise by 5.2% and 4.3% respectively in April, they are both now expected to post negative growth, being downgraded to falls of 14% and 4.5% respectively. Pan- Arab spend, which was deemed to be robust, will also fall 10.4% from $2.25 billion to $2 billion. Qatar, Kuwait and Lebanon, are however predicted to show positive growth of 1.3%, 4.7% and 5.3% respectively. “The political turmoil has spread further, and advertisers have continued to pull campaigns in the three relatively large ad markets that have been engulfed in this turmoil (Bahrain, Egypt and Oman), as well as cutting back their exposure in pan-regional media,” says ZenithOptimedia’s report. “On the upside, we now predict an 8.9 % rebound in 2012 (compared to the 4.8 % we predicted in April), on the assumption that the political situation in the region stabilises,” the report added. The effect of these changes at a global level will be limited as the region accounts for only 1 % of global adspend. Positively, the global advertising market is still expected to return to growth. ZenithOptimedia had previously predicted a 4.2% global growth, and this has only been reduced slightly to 4.1% and a total adspend of $471 billion. So, what does this mean for the newly emerging DOOH medium in the region?We don’t have any precise figures (we’re still championing for better metrics in this area, with various research projects in progress), but we do know that DOOH spend has been affected, as have all mediums, and the growth we expected and hoped for, hasn’t been as strong as we would have liked.
- New brands and advertisers are trying out DOOH - One of the biggest challenges we have faced, is getting advertisers to try out the medium. As ever, people are cautious with anything new. However, time and time again, we are finding that once brands test the medium, experience the benefit of animation and impactful creative and enjoy the fact they can alter their content according to time of day or as their offers change, that they do come back time and time again. We have one client that dipped their toe in the DOOH waters at the end of last year, who have just booked their 5th campaign with us.
- In-mall ad networks across the region are definitely busier – Malls remain one of the most commonly used DOOH venues in the region at present, mainly due to the amount of time consumers spend in them. We conduct regular audits of all activities across the digital screen networks in our region and we are definitely seeing inventory up. There is still a way to go in terms of quality of content, with too many networks and advertisers happy to throw a static poster up on screen, rather than investing in quality animation and content designed to maximise the benefits of the medium, but it’s moving in the right direction.
- The automotive industry is making the move - Globally the automotive industry is one of the biggest spenders on DOOH media and have produced some fantastic creative work, to really make the most of the medium. In the MENA region, automotive clients have been slow to adopt. However, in 2011, we have seen the likes of VW and Chevrolet start experimenting with in-mall advertising screens, and we expect others to follow.
- Advertisers/ brands still feel safer with static and traditional OOH mediums - Traditional OOH advertising is big business in the region, with many suppliers and options to choose from. The biggest challenge remains in getting advertisers to move over from the safer, tried and tested medium, and one that is very affordable, to something a little unknown. It is happening, but it’s taking time and a lot of education, and DOOH is still very much an add on to a static campaign.
- New DOOH companies are launching – We’re regularly hearing news of new DOOH companies set to launch in the region. Companies are either expanding from more mature markets like the UK/ Western Europe, traditional OOH companies are trialling new technologies and media companies are expanding their portfolio. We like to think they’ve done their research and have a business plan in place, so there must still be a good opportunity to be seized.
ZenithOptimedia’s report this week, may not have been the best news we were hoping for, but those of us on the ground, knew it was coming from what we have seen in recent months and the overall reluctance to spend, even by the biggest advertisers. Not ones to remain down hearted, we remain confident that 2011 will witness a change in perception and willingness to consider the DOOH medium in the MENA region, which will help it go from strength to strength in 2012, when all being well, spending power will be on the rise again.
